A potentiometer circuit is set up as shown. The potential gradient across the potentiometer wire, is k volt/cm and the ammeter, present in the circuit, reads 1.0 A when two way key is switched off. The balance points, when the key between the terminals (i) 1 and (2) (ii) 1 and 3, is plugged in, are found to be at lengths l₁ cm and l₂ cm, respectively. The magnitudes of the resistors R and X in ohm, are then, respectively equal to :

$k l_1$ and $k\left(l_2-l_1\right)$

In the first case potential difference balance against resistance $R = kl_1$

Potential difference against, $R+ X= kl_1$

Potential difference over $X \Omega=k\left(l_2-l_1\right)$